For a quarter-century, developers who worked in Baltimore County were paying into bond funds designed to cover the cost of growth like it was 1999.

Until very recently, that was the last time the county raised the cost of reimbursing it for items such as pipes, asphalt, concrete, aggregate and other increasingly expensive items. The money developers pay into the fund goes toward the county’s cost of finishing the build-out of new neighborhoods — as well as paying for inspectors who make sure the buildings are safe.

The cost of those construction materials — some of them petroleum-based products indexed to oil prices — has risen more than 130% since 1999. And the county is only now starting to recoup the losses to its bond fund, increasing what it charges by one-third every year beginning in 2024.

By 2026, the county should be caught up, according to Matt Leone, chief of construction contracts for the county Department of Public Works and Transportation.

By then, the prices might have to increase again, depending on inflation.

When told of the 1999 pricing issue, most county council members had no idea — though they all approved an adjustment to the cap on the bond fund this year.

“That is ridiculous,” said Pat Young, a Catonsville Democrat. “Why on earth would we do that?”

Here’s some things to know about why the county is charging developers Clinton-era prices, and how the county construction party came to an end.

What is the county bond fund?

When Baltimore County approves new developments, officials collect 8% of the total project cost for inspection fees, Leone said. The fee revenue helps pay the salaries for inspectors who make sure the water lines, sewers, roads and buildings are sound.

Developers also pay a bond, which is 10% higher than the project’s estimated cost. If a road costs $100,000 for the county to build, for example, the developer pays $110,000. If the project is completed on time with no problems, the developer gets the bond back. If they don’t, the county holds all or part of the bond until the project is finished to the inspectors’ satisfaction. Think of it like a security deposit for your rent. Damage the unit or don’t pay the rent, and the landlord keeps it.

Why were fees set to 1999 prices?

In 1999, Baltimore County indexed both the bond fund and the 8% inspection fee to that year’s prices. There it stayed, through six county executives, not to mention the aftermath of the 9/11 attacks in 2001, the Great Recession from 2007 to 2009, and the COVID-19 pandemic starting in 2020.

What that means, Leone explained, is that the bond doesn’t generate enough money to cover the actual work required in 2025. Developers were basing their estimates of the total cost — and by extension what they owe the county bond fund — on what pipes, asphalt, wood and other material costs in 1999 instead of now.

If the developer walked away before finishing the job, the county was left holding the proverbial bag.

How much money did the county lose?

Leone cannot say how much money the county lost from those low 8% inspection costs over the years because the county does not have those records.

Regarding the bond fund, the shortfall resulted in unfinished community projects and the ensuing outrage. If the county didn’t have funds to install the public amenities to support a newer development, it simply didn’t. As a result, projects were left with “finishing touches” undone. Things like sewer pipes were connected, but a road’s last coat of asphalt might be skipped.

Even there, Leone could not say how widespread the problem was. He showed a 2023 photo of an Owings Mills community with $600,000 homes and a brand-new road already filled with holes, but the roads were freshly paved when a Banner reporter visited last week.

How often do developers walk away?

Not often, Leone said. But occasionally, when a project exceeded the planned cost, the developer might prefer to lose their bond at 1999 prices than finish the job.

The department does what it can to make sure those developers never work with the county again.

But Lauren Buckler, director of the county’s Department of Public Works and Transportation, said that sometimes a company will register as a new limited liability corporation (LLC) and try again to develop projects. It is difficult to police, she said. Increasing the pricing to modern rates means fewer companies may walk away.

Why did it take so long to fix the pricing?

While council members voted to increase the bond fund threshold at Buckler’s request, most echoed Young in saying they had no idea that the 1999 pricing was behind the request.

Inspector General Kelly Madigan said no one ever asked her to investigate the matter.

But developers were well aware of the discrepancy, Leone said, and were not clamoring for a change.

“They all knew what they were doing,” he said, “whether they wanted to admit it or not.”

Others deep in the permitting and construction departments would bring it up periodically, Leone said. Someone would say it should be fixed.

But getting the pricing right is a huge undertaking. Leone estimated that 100 items are part of each category — water, sewer, storm drains and roads. Every valve, every pipe, every washer needed to be indexed to a list of current prices.

The county used something called the Turner Index, which is public, so companies can check prices against what the county says they should be. The process began on Leone’s second day of work in 2022, when Buckler alerted him to the problem. It is ongoing. The county bumped up the costs 33.3% in January 2024 and again in January 2025 and will do the same in 2026. Developers requested the phase-in.

Was there pushback from developers? Did that cause the delay?

County officials do not recall any resistance. The Banner reached out to several developers in the county as well as to the Maryland Building Industry Association. None responded to requests for comment.

While the price change took longer than he’d hoped, Leone is happy it’s in place now.

“It’s nice to get stuff done,” he said, “and ultimately feel like we’re putting the county in a better spot to do what the residents trust us to do.”